HB 891 — An Act amending the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, providing for Keystone State Apprenticeship Tax Credit; establishing the Keystone State Apprenticeship Tax Credit Program; and imposing duties on the Department of Labor and Industry.

PRINTER'S NO.   931

                     THE GENERAL ASSEMBLY OF PENNSYLVANIA



                         HOUSE BILL
                         No. 891
                                                  Session of
                                                    2025

     INTRODUCED BY WEBSTER, MADDEN, SANCHEZ, KHAN, HILL-EVANS,
        INGLIS, CERRATO, NEILSON AND MALAGARI, MARCH 13, 2025

     REFERRED TO COMMITTEE ON LABOR AND INDUSTRY, MARCH 13, 2025


                                       AN ACT
 1   Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
 2      act relating to tax reform and State taxation by codifying
 3      and enumerating certain subjects of taxation and imposing
 4      taxes thereon; providing procedures for the payment,
 5      collection, administration and enforcement thereof; providing
 6      for tax credits in certain cases; conferring powers and
 7      imposing duties upon the Department of Revenue, certain
 8      employers, fiduciaries, individuals, persons, corporations
 9      and other entities; prescribing crimes, offenses and
10      penalties," providing for Keystone State Apprenticeship Tax
11      Credit; establishing the Keystone State Apprenticeship Tax
12      Credit Program; and imposing duties on the Department of
13      Labor and Industry.
14      The General Assembly of the Commonwealth of Pennsylvania
15   hereby enacts as follows:
16      Section 1.     The act of March 4, 1971 (P.L.6, No.2), known as
17   the Tax Reform Code of 1971, is amended by adding an article to
18   read:
19                              ARTICLE XVIII-I
20               KEYSTONE STATE APPRENTICESHIP TAX CREDIT
21   Section 1801-I.    Definitions.
22      The following words and phrases when used in this article
23   shall have the meanings given to them in this section unless the
 1   context clearly indicates otherwise:
 2      "Certified employer."    A qualified employer that has received
 3   a final certificate of eligibility from the department after the
 4   department has determined that the qualified employer has
 5   fulfilled all eligibility criteria to participate in the
 6   program. The final certificate of eligibility shall state the
 7   actual amount of tax credit that a certified employer is
 8   entitled to claim and the allocation year of the tax credit.
 9      "Construction."    The act of constructing, reconstructing,
10   altering, maintaining, moving, rehabilitating, repairing,
11   renovating, fabricating, servicing or demolishing a building,
12   structure, improvement or component, or an act relating to the
13   excavation of or other development or improvement to land.
14      "Department."    The Department of Labor and Industry of the
15   Commonwealth.
16      "Disadvantaged youth."    An individual who is:
17          (1)     Between 16 and 24 years of age when the individual
18      begins an apprenticeship.
19          (2)     Low-income or at-risk, as those terms are defined by
20      the department.
21      "Mentor."    An individual who provides instruction, guidance
22   and support to the apprentice on a regular basis throughout the
23   apprentice's completion of the apprenticeship as the apprentice
24   seeks employment in the field or industry of the apprenticeship.
25      "Participating employer."    A qualified employer that has
26   applied to participate in the program and received a preliminary
27   certificate of tax credit from the department. The preliminary
28   certificate shall state the maximum amount of the tax credit
29   that the employer may be able to claim if the applicant becomes
30   a certified employer.

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 1      "Program."     The Keystone State Apprenticeship Tax Credit
 2   Program established under section 1802-I.
 3      "Qualified apprentice."     An individual employed by a
 4   participating employer in a full-time position for at least six
 5   months of a calendar year under a qualified apprenticeship
 6   agreement with a qualified employer. An individual employed by a
 7   qualified employer shall not be deemed a qualified apprentice if
 8   the individual has not completed the apprenticeship training
 9   program within one year of the expected date of completion of
10   the program.
11      "Qualified apprenticeship agreement."     An apprenticeship
12   agreement that has been registered with and approved by the
13   department for a trade other than a construction trade.
14      "Qualified employer."     An employer that participates in a
15   department-approved apprenticeship program.
16      "Secretary."     The Secretary of Labor and Industry of the
17   Commonwealth.
18   Section 1802-I.    Powers and duties of secretary.
19      (a)   Establishment.--The Keystone State Apprenticeship Tax
20   Credit Program is established to provide tax incentives to
21   certified employers for employing qualified apprentices under a
22   qualified apprenticeship agreement registered with the
23   department under section 4 of the act of July 14, 1961 (P.L.604,
24   No.304), known as The Apprenticeship and Training Act.
25      (b)   Allocation.--The secretary may allocate up to
26   $10,000,000 in tax credits annually beginning July 1, 2025, and
27   ending on July 1, 2030. Any unused annual allocation of tax
28   credits shall be made available in each of the subsequent years
29   before 2030.
30      (c)   Guidelines and criteria.--

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 1            (1)   The secretary shall establish guidelines and
 2      criteria that specify requirements for qualified employers to
 3      participate in the program, including criteria for certifying
 4      qualified apprentices.
 5            (2)   The secretary may give preference to qualified
 6      employers that hire and train disadvantaged youth through
 7      qualified apprenticeship agreements and qualified employers
 8      that are engaged in demand occupations or industries or in
 9      regional growth sectors, including those identified by the
10      department, such as clean energy, health care, technology,
11      including software engineering and web development, advanced
12      manufacturing and conservation.
13            (3)   The secretary may give preference to employers that
14      employ apprentices in newly established apprenticeship
15      programs.
16            (4)   The secretary may take the following factors into
17      consideration when evaluating whether to approve an
18      application in a year subsequent to the year in which a
19      qualified employer was determined to be a certified employer:
20                  (i)    The length of the qualified apprenticeship
21            agreement into which the certified employer has entered.
22                  (ii)    The number of apprentices who have graduated
23            from the apprenticeship program to which the qualified
24            apprentice employed by the certified employer belongs.
25                  (iii)    The number of apprentices in the
26            apprenticeship program who the qualified employer has
27            hired.
28                  (iv)    Other factors the secretary deems relevant.
29   Section 1803-I.        Keystone State Apprenticeship Tax Credit.
30      (a)   Eligibility.--

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 1          (1)   A certified employer shall be entitled to a tax
 2    credit against income or franchise tax for each qualified
 3    apprentice. The base tax credit allowed under the program
 4    shall be computed as follows:
 5                (i)    Two thousand dollars for each first-year
 6          apprentice.
 7                (ii)    Three thousand dollars for each second-year
 8          apprentice.
 9                (iii)    Four thousand dollars for each third-year
10          apprentice.
11                (iv)    Five thousand dollars for each fourth-year
12          apprentice.
13                (v)    Six thousand dollars for each fifth-year
14          apprentice.
15          (2)   The apprentice's status under paragraph (1) shall be
16    determined on the last day of the calendar year or, if the
17    apprentice is no longer employed by the participating
18    employer on the last day of the calendar year, on the last
19    day of the apprentice's employment with the participating
20    employer.
21    (b)   Disadvantaged youth tax credit.--
22          (1)   In lieu of the tax credit specified in subsection
23    (a), for each qualified apprentice who is considered a
24    disadvantaged youth for each tax year:
25                (i)    Five thousand dollars for each first-year
26          apprentice.
27                (ii)    Six thousand dollars for each second-year
28          apprentice.
29                (iii)    Seven thousand dollars for each third-year,
30          fourth-year or fifth-year apprentice.

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 1            (2)   The qualified apprentice's status under paragraph
 2      (1) shall be determined on the last day of the calendar year
 3      or, if the qualified apprentice is no longer employed by the
 4      participating employer on the last day of the calendar year,
 5      on the last day of the apprentice's employment with the
 6      participating employer. If a disadvantaged youth under 25
 7      years of age begins an apprenticeship, a certified employer
 8      shall be eligible to continue to receive the tax credit for
 9      the disadvantaged youth under this subsection until that
10      apprentice completes the apprenticeship.
11      (c)   Increase.--If an apprentice has been trained in the
12   apprentice's trade by a mentor for the entirety of the calendar
13   year, the base tax credit amounts described in subsection (a)
14   shall be increased by $500.
15      (d)   Other tax credit.--A certified employer shall not be
16   allowed a tax credit under this article for an apprentice if the
17   apprentice is the basis for any other State tax credit.
18   Section 1804-I.    Application and approval.
19      (a)   Application.--To participate in the program, a qualified
20   employer must submit to the secretary an application in a form
21   prescribed by the secretary. As part of the application, a
22   qualified employer must:
23            (1)   Agree to allow the Department of Revenue to share
24      the applicant's tax information with the department.
25      Information shared as a result of this agreement is exempt
26      from access under the act of February 14, 2008 (P.L.6, No.3),
27      known as the Right-to-Know Law.
28            (2)   Allow the department and the department's agents
29      access to any and all books and records the department may
30      require to monitor compliance.

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 1      (b)    Approval.--After reviewing a qualified employer's
 2   completed application and determining that the qualified
 3   employer meets the eligibility conditions specified in this
 4   article and any applicable regulations promulgated by the
 5   secretary, the department may admit the applicant into the
 6   program as a participating employer and provide the applicant
 7   with a preliminary certificate of eligibility establishing the
 8   qualified employer as a participating employer and stating the
 9   maximum amount of tax credit for which the applicant is
10   eligible.
11   Section 1805-I.     Final report.
12      To receive a final certificate of tax credit, the
13   participating employer must annually submit a final report to
14   the secretary in a form prescribed by the department. The report
15   must demonstrate that the applicant has satisfied all
16   eligibility requirements under this article and provided all the
17   information necessary for the secretary to compute an actual
18   amount of tax credit allowed for that calendar year,
19   notwithstanding the fact that a participating employer's taxable
20   year may be a fiscal year. The final certificate of eligibility
21   shall state the actual amount of tax credit that a certified
22   employer is entitled to claim and the allocation year of the tax
23   credit.
24   Section 1806-I.     Certification of employer.
25      (a)    Certification.--After review and approval of the final
26   report, the secretary shall certify the participating employer
27   as a certified employer and issue a final certificate of tax
28   credit. The certificate shall include the following information:
29             (1)   The name and employer identification number of the
30      certified employer.

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 1            (2)   The actual amount of tax credit to which the
 2      certified employer is entitled for that calendar year, which
 3      actual amount cannot exceed the amount of tax credit listed
 4      on the preliminary certificate but may be less than the
 5      amount.
 6            (3)   The allocation year of the tax credit.
 7            (4)   Any other information deemed necessary by the
 8      secretary.
 9      (b)   Taxable year.--If a certified employer's taxable year is
10   a fiscal year, the certified employer shall be entitled to claim
11   the tax credit on the return for the fiscal year that includes
12   the last day of the calendar year covered by the final
13   certificate of tax credit.
14   Section 1807-I.    Annual report.
15      (a)   Report.--The secretary shall annually publish a report
16   containing the following information:
17            (1)   The names and addresses of certified employers
18      issued a final certificate of eligibility under this article.
19            (2)   The work location of each apprentice generating a
20      tax credit.
21            (3)   The amount of Keystone State Apprenticeship Tax
22      Credits allowed to the certified employer as specified on the
23      final certificate of eligibility.
24            (4)   The number of each of the first-year apprentices,
25      second-year apprentices, third-year apprentices, fourth-year
26      apprentices and fifth-year apprentices and which individuals
27      are considered disadvantaged youth.
28      (b)   Recommendations and publication.--The secretary shall
29   include in the report under subsection (a) the relevant
30   industries of certified employers and recommendations for

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1   legislative or other action to further the intent and purpose of
2   the program. The report shall be published by December 31 on the
3   department's publicly accessible Internet website.
4      (c)   Promotion.--The secretary shall promote, publish and
5   disseminate information concerning the Keystone State
6   Apprenticeship Tax Credit and other available funding,
7   particularly targeting industries and fields of business not
8   currently taking advantage of apprenticeships.
9      Section 2.   This act shall take effect in 60 days.




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